Investors call on G20 to end fossil fuel subsidies

The businesses, which are worth a combined $2.8 trillion (£2.25tn) and include insurance firms Aviva, KBI and Legal and General, said the support for production and consumption of fossil fuels is a key concern to the finance sector.

They say subsidies increase the risk of stranded fossil fuel assets, decrease the competitiveness of key industries and negate the carbon price signals many investors have been calling for.

They believe that’s in addition to putting a significant burden on government budgets and damaging public health and the environment by increasing air pollution.

The investors suggest removing the subsidies will help mobilise green financing, increase the efficiency and transparency of energy markets and shape a sustainable and low carbon future in line with the goals of the Paris Agreement.

They hope the G20 nations will react by setting a clear timeline for the full phase-out of all fossil fuel subsidies within four years, starting with exploration and coal production.

The businesses also suggests a review of progress in 2018.

Meryam Omi, Head of Sustainability and Responsible Investment Strategy at Legal and General, said: “As investors, we are faced with a tremendous opportunity to finance the low carbon transition and as such, we look for the governments to set a clear timeline and a plan for phasing out fossil fuel subsidies to enable an orderly transition.”